MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Banks and Banking; Insurance

By: Representative Guice

AN ACT TO CLARIFY THAT, IN ADDITION TO OTHER RIGHTS A CREDITOR MAY HAVE, WHEN A DEBTOR FAILS TO MAINTAIN REQUIRED PROPERTY INSURANCE OR FAILS TO PROVIDE THE CREDITOR WITH TIMELY NOTICE OF THE PURCHASE OR RENEWAL OF SUCH INSURANCE COVERAGE, THE CREDITOR MAY PURCHASE INSURANCE COVERAGE ON THE PROPERTY; TO AMEND SECTION 63-19-33, MISSISSIPPI CODE OF 1972, TO CLARIFY THAT INSURANCE PURCHASED BY A CREDITOR OR HOLDER WHEN A DEBTOR FAILS TO MAINTAIN REQUIRED PROPERTY INSURANCE OR FAILS TO PROVIDE THE CREDITOR OR HOLDER WITH TIMELY NOTICE OF THE PURCHASE OR RENEWAL OF SUCH COVERAGE, AND CERTAIN INSURANCE, SHALL BE GOVERNED BY SPECIFIED PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. In addition to other rights a creditor may have, when a debtor fails to maintain required property insurance or fails to provide the creditor with timely notice of the purchase renewal of such insurance coverage, the creditor may purchase insurance coverage on the property, including insurance protecting only the creditor's interest in such property. Such insurance premiums along with the administrative fees for obtaining such insurance may be added to the outstanding balance of the debtor's indebtedness and made subject to additional finance charges, credit service charges and other charges at the rates previously agreed to by the debtor. When a debtor fails to maintain required property insurance or fails to provide the creditor with timely notice of the purchase or renewal of such insurance coverage, the creditor shall have no obligation to purchase insurance coverage on the property. Various types of insurance or the purchase thereof may be provided for in a credit transaction, and this act shall not limit such provisions. This act does not create a fiduciary relationship between the creditor and the debtor or any other person.

SECTION 2. Section 63-19-33, Mississippi Code of 1972, is amended as follows:

63-19-33. (1) The amount, if any, included in a retail installment contract for insurance, which may be purchased by the holder of the retail installment contract, shall not exceed the applicable premiums chargeable in accordance with the rates filed with the State Insurance Commission. If dual interest insurance on the motor vehicle is purchased by the holder it shall, within thirty (30) days after execution of the retail installment contract, send or cause to be sent to the buyer a policy or policies or certificates of insurance, written by an insurance company authorized to do business in this state, clearly setting forth the amount of the premium, the kind or kinds of insurance, the coverages and all the terms, exceptions, limitations, restrictions and conditions of the contract or contracts of insurance. The buyer shall have the privilege of purchasing such insurance from an agent or broker of his own selection; in such case, however, the inclusion of the insurance premium in the retail installment contract shall be optional with the seller.

No holder shall unreasonably or arbitrarily refuse to accept coverage by an insurance company tendered by the buyer.

(2) If any insurance is cancelled, or the premium adjusted, any refund of the insurance premium received by the holder shall be credited to the final maturing installments of the contract except to the extent applied toward payment for similar insurance protecting the interests of the buyer and the holder or either of them.

(3) This section shall not apply to insurance purchased by a creditor or holder when a debtor fails to maintain required property insurance or fails to provide the creditor or holder with timely notice of the purchase or renewal of such coverage. Such insurance and the insurance referred to in Section 1 of this act shall be governed by the provisions of Section 1 of this act.

SECTION 3. This act shall take effect and be in force from and after July 1, 1998.